How to Determine the ROI of TMS

How To Determine The ROI Of TMS
From integrated parcel shipping solutions to autonomous logistics, an advanced transportation management system (TMS) can add significant value to your brand. Unfortunately, recognizing the real ROI of TMS solutions can be difficult at best. According to Nicholas Carretta of Inbound Logistics, “Sales representatives tend to oversell things in their pursuit of new clients. This is problematic for the industry because it discredits TMS solutions when users expect 25% savings yield significantly less.” Fortunately, supply chain leaders that take extra care and follow these steps can determine the ROI of TMS platforms, inclusive of direct and indirect cost savings, and make the best decision for their business.

Think About Your Growth Plans, Including Whether Your Company Looks to International Expansion

An initial view of the potential ROI of TMS implementation and enterprise resources is based on how your business operates today. But the real ROI of TMS platforms rests with its scale. In other words, as the transportation network grows, the potential ROI should grow with the business. For that reason, it is imperative to view the possible ROI not only from a short-term outlook, but also long term.

Evaluate the ROI of TMS Automated Functions

The next step of evaluating the ROI of a TMS involves autonomous logistics. An effective TMS should result in labor hours savings. That is the result of fewer clicks and spending less time managing individual loads. However, it is possible to maintain the same number of labor hours while expanding the overall volume of activity and shipments. Recognizing that cause and effect relationship is critical to evaluating the ROI of the platform correctly.

Choose a Platform That Leverages EDI and API to Connect With More Trading Partners

Additional savings and opportunities to shorten the time to ROI of TMS implementation rest within the onboarding processes. Instead of relying on outdated, manual onboarding processes, it is possible to shorten the process by leveraging advanced technologies to do the integration and onboarding for you. That includes applying electronic data interchange (EDI) and application programming interfaces (API) to connect to more carriers, trading partners, and customers. Using those technologies also reduces the costs associated with individual calls from a traditional server.

Remember Your Settlement Process Impacts From TMS Implementation

Evaluating the ROI of TMS must also include reviewing the settlement processes and how a data-driven approach could benefit them. For example, centralizing data and document storage within an overarching TMS would reduce the problems that may arise when auditing or performing additional paperwork checks as part of regular freight settlement. In turn, trading partners can be paid swifter and more accurately.

Look to Soft ROI Improvements Too, Including Increased Employee Satisfaction, Ease-of-Use, and More

Implementing a TMS is not solely about decreasing the overhead expenses of freight management. It also includes multiple soft savings, such as improved employee happiness, reduced customer complaints, better collaboration with trading partners, and more. While it can be challenging to assign a direct, hard cost to these improvements, they remain invaluable for company growth and profitability.

Assess the ROI From the Start With a True Partner Like MercuryGate in Your Corner

A best-of-breed TMS solutions provider will not rely on trickery or smoke and mirrors to showcase possible ROI. And the best solutions will shorten the time to ROI well beyond what most realize. With that in mind, it is imperative for supply chain leaders to carefully apply the aforementioned steps to determine the ROI of TMS platforms before, during, and after an initial TMS implementation. Regardless of where your company is in that process today, MercuryGate can help you understand the true ROI of a TMS solution. Get started on the path toward a better ROI of TMS implementation by choosing MercuryGate now. We have developed models for assessing the potential value of a TMS based on driving growth, reducing costs, and streamlining processes. Access our Self-Guided Value Calculator, or for even deeper insights request a personalized business case analysis with our Guided ROI Calculator.

Discover your own assessed value with our ROI calculators

Phil Melton
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